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Last Updated: Friday, 6 January 2006, 16:00 GMT
Chinese revolution turns hi-tech
Spencer Kelly
By Spencer Kelly
Click presenter

Sixty years after the revolution engineered by Chairman Mao, China is in the midst of a different revolution - of a digital variety.

Chinese flag
Symbols of Communist China now sit alongside those of capitalism
Since Mao's death in 1976, China has changed enormously, racing to catch up with the rest of Asia.

Mobile phones and cameras have become must-haves - everywhere you go, people are talking, texting, and surfing.

An explosion of capitalism has given cities like Shanghai and Beijing futuristic skylines. Big business and consumer technology alike have found a new home here.

The country is already the world's largest producer of mobile phones, PCs and cameras, which it can churn out in their millions - and all because of China's biggest resource: people.

It is worth taking a minute to look at the statistics, because they are truly amazing. China is the world's most populous country, with 1.3 billion people.

On size alone, it is fast becoming a technology superpower and it almost has no choice in the matter. For example, even though only 8% of its people have access to the internet, this equates to 100 million people online, second only to the US.

The Chinese Government is very keen to make sure its internet infrastructure is up to the job. It is quite literally bringing its people up to speed.

Dorothy Yang, research director at IDC Analysts, told Click: "About 70 to 80% of internet users use broadband. One reason is that broadband access is quite cheap in China - it only costs about $10-15 a month for unlimited internet access."

Phone love

No longer just a tech producer, China is becoming a gargantuan tech consumer.

Mobile phone user passes a phone-shaped balloon
Population: 1.3bn
Net penetration: 8%, or 100m people (second largest in world)
Mobile market: 380m phones (largest in world)
China is dotted with rabbit warrens of small electronics boutiques, selling everything from known brands to home-made kit, multi-coloured CDs to 2GB memory cards. No-one can accuse the Chinese of being behind the times.

It will come as little surprise that China is now the world's largest cell phone market, with more than 380 million mobiles. And, just like internet penetration, the number is rising at an impressive rate.

Just like the rest of the world, they are in love with their phones.

But perhaps here, more than in most countries, phones have an added value. In a place where public displays of affection and freedom to say what you want are still not to be taken for granted, mobile phones offer new privacy for conversation and romance.

Walk into a mobile phone store and you are offered only two choices of network, but a multitude of home-made brands of handset, some designed to satisfy even the most demanding user: I found one box that was a MP3 player, an MPEG4 video player, a PDA, a two megapixel camera with flash and a video camera.

Nonetheless, despite all the bells and whistles, the home-made jobs often lack the style and glamour of the established brands, which most Chinese still opt for.

Entrepreneurial flair

China's reputation as a source of cheap labour and cheap goods is being challenged - there is also innovation here.

People are surprised by China because it's been like a sleeping lion for years. Now it's starting to jump
Jack Ma, entrepreneur
In 2000, Click spoke to Jack Ma, a budding Chinese entrepreneur who had dreams of setting up a web service aimed at connecting traders across China, to help them find the best price for goods and services.

Five years on, he is one of the richest men in the country. He runs a range of online marketplaces, under the brand name Alibaba, including TaoBao, a rival to eBay, and an online payment system.

In China, business is a very personal thing, but Jack seems to have persuaded people that they can do business on the web.

He says: "The internet is a community; don't think it's just computers. Only if you build your website like a community can your company grow fast."

As to whether China can become a technology superpower, Jack believes this will take time and luck.

Mobile phone user in China
Chinese consumers have a vast choice of tech toys at their disposal
"Today I don't think people should have expectations of that. It is true that China is growing very fast on the internet, but the other challenge is encouraging innovation and creativity, which takes a very long time.

"People are surprised by China because it's been like a sleeping lion for years. Now it's starting to jump and people say: 'oh my God, it's growing so fast' but it's not that scary."

Jack also relishes challenging the dominance of the US in the technology world.

"Otherwise I would not compete with eBay or Google", he says.

"They could be very successful in the US, in the West, but in China? No, because we're more entrepreneurial than them, in China today.

"They were very entrepreneurial 25 years ago, but today they're not entrepreneurial at all. They're very corporate."

Spreading influence

China is so ready to compete with US technology that, in one particular case, it bought the company.

In December 2004, Chinese PC manufacturer Lenovo did the unthinkable - it bought part of IBM. The part, that is, that makes PCs.

Lenovo was already China's largest PC maker but, after the IBM deal, it has shot up from 9th largest to 3rd largest PC manufacturer in the world.

Lenovo's Alice Li told Click: "It's a very important transaction for us. For Lenovo that acquisition makes us a truly international company.

"We've accumulated an international management team and reputable international brands - for example, Thinkpad - and all the patented technology related to that brand. And we also now have an immediate worldwide distribution network."

Lenovo seems determined to continue pushing the country's technology scene by thinking big and aiming high. It could very well become China's first truly international company.

China has the size, and it is showing signs of determination to spread its influence beyond its borders.

At the dawn of a new century, there is a new kid on the block.

The great firewall of China
06 Jan 06 |  Click Online


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